7 Best Practices for QuickBooks Online Users

August 25, 2017

Even if you've been using QuickBooks Online for a long time, it's good to step back and evaluate your actions.

"Best practices" aren't enforceable rules. They're simply guidelines businesses commonly follow in one area or another. If you're in retail, for example, one best practice might be to always ask customers checking out if they found everything they were looking for. This serves two purposes: It conveys a feeling of concern for the customer's shopping experience, and may also lead to increased sales.

QuickBooks Online has many best practices, some of which serve multiple purposes. For example these practices can:

  • Keep your company data safe and clean.
  • Provide insight on your financial status.
  • Save time.
  • Lead you to better relationships with customers and vendors.

How many of the following practices are common habits for your business?

1.Reconcile accounts regularly

One of QuickBooks Online's most useful features is its ability to connect to your financial institution's websites and download cleared transactions. QuickBooks Online also offers tools to help you keep your accounts reconciled, just as you would do every month with paper statements. Reconciling accounts can help you uncover errors, give you a truer picture of your cash flow, and even improve the accuracy and timeliness of some reports.


The above image depicts the typical format that you can expect to see on QuickBooks Online's reconciliation page. Simply enter your information into the required data fields and you'll be on your way.

While reconciling accounts might not be your favorite thing to do, keeping up with it on a regular basis, even on accounts with very few transactions, will help ensure that your business continues to run smoothly, the way it should.

2. Clean up your lists

Some lists in QuickBooks Online are not excessively long and do not require regular maintenance. You do not have to worry about, for example, Payment Methods, Terms, or Classes. Your lists of customers and vendors, as well as products and services, on the other hand, can grow fairly inconvenient over the years. Not only could they cost you valuable time having to search through numerous entities to complete transactions, but they could also put unnecessary stress on your company file. If you are unable to delete certain entries from your lists, remember that you can always make them inactive until they are needed again.

3. Log out of QuickBooks Online

Never leave QuickBooks Online open when you leave your work area.
This goes for everyone, even people who work alone and do not access their company files away from their work stations. Obviously, this keeps someone else from authorizing payments or otherwise compromising your financial information. However, remembering to log out also protects the integrity of your data file in case your internet connection suffers an outage.

4. Keep track of 1099 vendors

Whether your company uses 10 vendors or a hundred or more, you may have to supply at least some of them with an IRS Form 1099 at about the same time you're preparing W-2s for employees. Your 1099-related tasks will be much easier if those individuals and/or companies are earmarked. If you think vendors might need 1099s when you create their records in QuickBooks Online, click in the box to the left of Track payments for 1099 in the lower right corner. Not sure? Ask us.

5. Classify everything with care

Every time you have to create a record or transaction where categories are involved (i.e., Classes, Customers and Vendors, Territories), check and double-check that you've assigned them the correct classification. Errors here can result in problems with daily workflow and incorrect reports.

6. Create a meaningful group of Classes, and use them faithfully

Related to the practice above, classifying with care, creating groups of classes can help you make better business decisions. For instance, creating the sub-class, construction, under the larger class, remodeling, as shown below, might help you better allocate and track your funds.

To create your list of Classes, click the gear icon in the upper right and select All Lists | Classes | New. It is important to note that you can have up to five sub-classes within a class.

7. View reports on a regular basis

There are some advanced financial reports in QuickBooks Online that we should be creating for you on a regular basis, either monthly or quarterly. These include Profit and Loss, Balance Sheet, and Statement of Cash Flows. While the mechanics of creating these reports are not difficult, analyzing them correctly is. When understood, though, they will help you determine which areas of your business are running effectively. Keep in mind that you should be running reports on your own, at frequencies you think are best, for things like A/R Aging Detail, Unpaid Bills, and Sales by Class Detail.

If you've been using QuickBooks Online for a while, you could probably come up with your own list of best practices. If you're new to the site, consider scheduling some time with us to go over more of them. Developing good habits from the start will reduce the need for troubleshooting down the road!

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